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Marginal note:Definitions

• 110 (0.1) The following definitions apply in this section.

  specified person

  specified person , at any time, means a qualifying person that meets the following conditions:

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  • (b) if the qualifying person is a member of a group that annually prepares consolidated financial statements, the total consolidated group revenue reflected in the last consolidated financial statements of the group presented to shareholders or unitholders — of the member of the group that would be the ultimate parent entity, as defined in subsection 233.8(1), of the group if the group were a multinational enterprise group, as defined in subsection 233.8(1) — before that time exceeds $500 million; and

  • (c) if paragraph (b) does not apply, it has gross revenue in excess of $500 million based on

    • (i) the amounts reflected in the financial statements of the qualifying person presented to the shareholders or unitholders of the qualifying person for the last fiscal period of the qualifying person that ended before that time,

    • (ii) if subparagraph (i) does not apply, the amounts reflected in the financial statements of the qualifying person presented to the shareholders or unitholders of the qualifying person for the last fiscal period of the qualifying person that ended before the end of the last fiscal period referred to in subparagraph (i), and

  vesting year

  vesting year , of a security to be acquired under an agreement, means

  • (a) if the agreement specifies the calendar year in which the taxpayer’s right to acquire the security first becomes exercisable (otherwise than as a consequence of an event that is not reasonably foreseeable at the time the agreement is entered into), that calendar year; and

  • (b) in any other case, the calendar year in which the right to acquire the security would become exercisable if the agreement had specified that all identical rights to acquire securities become exercisable on a pro rata basis over the period that

    • (i) begins on the day that the agreement was entered into, and

    • (ii) ends on the day that is the earlier of

      • (A) the day that is 60 months after the day the agreement is entered into, and

      • (B) the last day that the right to acquire the security could become exercisable under the agreement. (année de dévolution)

• Marginal note:Employee options

  (d) an amount equal to 1/2 of the amount of the benefit deemed by subsection 7(1) to have been received by the taxpayer in the year in respect of a security (other than a security that is a non-qualified security) that a particular qualifying person has agreed after February 15, 1984 to sell or issue under an agreement, in respect of the transfer or other disposition of rights under the agreement or as a result of the death of the taxpayer because the taxpayer immediately before death owned a right to acquire the security under the agreement, if

• Marginal note:Employer deduction — non-qualified securities

  (e) an amount equal to the amount of the benefit in respect of employment with the taxpayer deemed by subsection 7(1) to have been received by an individual in the year in respect of a non-qualified security that the taxpayer (or a qualifying person that does not deal at arm’s length with the taxpayer) has agreed to sell or issue under an agreement with the individual, if

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  • (ii) at the time the agreement was entered into, the individual was an employee of the taxpayer,

• Marginal note:Election by particular qualifying person

  (1.1) For the purpose of computing the taxable income of a taxpayer for a taxation year, paragraph (1)(d) shall be read without reference to its subparagraph (i) in respect of a right granted to the taxpayer under an agreement to sell or issue securities referred to in subsection 7(1) if

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• (1.2) For the purposes of subsections (1.1) and (1.44), an amount is a designated amount if the following conditions are met:

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  • (c) the amount is payable in respect of an arrangement entered into for the purpose of managing the particular qualifying person’s financial risk associated with a potential increase in value of the securities under the agreement described in subsection (1.1) or (1.44).

• Marginal note:Determination of non-qualified securities

  (1.3) Subsection (1.31) applies to a taxpayer in respect of an agreement if

  • (a) a particular qualifying person agrees to sell or issue securities of the particular qualifying person (or another qualifying person that does not deal at arm’s length with the particular qualifying person) to the taxpayer under the agreement;

  • (b) at the time the agreement is entered into (in this subsection and subsection (1.31) referred to as the “relevant time”), the taxpayer is an employee of the particular qualifying person or of a qualifying person that does not deal at arm’s length with the particular qualifying person; and

• Marginal note:Annual vesting limit

  (1.31) If this subsection applies to a taxpayer in respect of an agreement, the securities to be sold or issued under the agreement, for each vesting year of those securities, are deemed to be non-qualified securities for the purposes of this section in the proportion determined by the formula

  A/B

  where

  A 

  is the amount determined by the formula

  C + D − $200,000

  where

  C 

  is the total of all amounts each of which is the fair market value at the relevant time of each security under the agreement that has that same vesting year, and

  D 

  is the lesser of

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  • (b) the total of all amounts each of which is an amount determined for C in respect of securities that have that same vesting year under agreements (other than the agreement) entered into at or before the relevant time with the particular qualifying person referred to in subsection (1.3) (or another qualifying person that does not deal at arm’s length with the particular qualifying person), other than

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• Marginal note:Non-qualified security designation

  (1.4) If subsection (1.31) applies to a taxpayer in respect of an agreement and the particular qualifying person referred to in paragraph (1.3)(a) designates one or more securities to be sold or issued under the agreement as non-qualified securities, the following rules apply:

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• Marginal note:Ordering of acquisition of securities

  (1.41) If a taxpayer acquires a security under an agreement and the acquired security could be a security that is not a non-qualified security, the security is to be considered a security that is not a non-qualified security for the purposes of this section.

• Marginal note:Ordering of simultaneous agreements — subsection (1.31)

  (1.42) If two or more agreements to sell or issue options are entered into at the same time and the particular qualifying person referred to in subsection (1.3) designates the order of the agreements, then the agreements are deemed to have been entered into in that order for the purposes of paragraph (b) of the description of D in subsection (1.31).

• Marginal note:Application of subsection (1.44)

  (1.43) Subsection (1.44) applies in respect of a taxpayer’s right to acquire a security under an agreement if

  • (a) subsection (1.31) applies to the taxpayer in respect of the agreement;

• Marginal note:Cash-out — securities not designated as non-qualified

  (1.44) If this subsection applies in respect of a taxpayer’s right to acquire a security under an agreement

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• Marginal note:Notification — non-qualified security

  (1.9) If a security to be issued or sold under an agreement between an employee and a qualifying person is a non-qualified security, the employer of the employee shall

  • (a) notify the employee in writing that the security is a non-qualified security no later than 30 days after the day that the agreement is entered into; and

  • (b) notify the Minister in prescribed form that the security is a non-qualified security on or before the filing-due date for the taxation year of the qualifying person that includes the time that the agreement is entered into.

executive compensation repayment amount

executive compensation repayment amount , of an eligible entity, means

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• (b) if the conditions in subparagraph (a)(i) or (ii) are met, the amount determined by the formula

  A × B

  where

  A 

  is

  • (i) a percentage assigned to the eligible entity under an agreement if

    • (A) the agreement is entered into by

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    • (B) the agreement is filed in prescribed form and manner with the Minister,

    • (C) the agreement assigns, for the purposes of this definition, a percentage in respect of each eligible entity referred to in clause (A) of this description,

    • (D) the total of all the percentages assigned under the agreement equals 100%, and

    • (E) the percentage allocated to any eligible entity under the agreement would not result in an amount allocated to the eligible entity in excess of the total of all amounts of deemed overpayments of the eligible entity under subsection (2) for the seventeenth qualifying period and any subsequent qualifying period, and

executive remuneration

executive remuneration , of an eligible entity, means

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• (b) if paragraph (a) does not apply and the eligible entity is required to make a similar disclosure to shareholders under the laws of another jurisdiction, the amount of total compensation reported in that disclosure (if the compensation of more than five individuals is required to be reported under that disclosure, using the five most highly compensated of those individuals); and

• (b) paid to, and received by, the parent or the other non-resident person, as agreed on in the election.

• (A) each shareholder of the disposing corporation immediately before the investment time is

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• (ii) on an amalgamation described in subsection 87(1) of two or more corporations (each of which is in this subparagraph referred to as a “predecessor corporation”) to form the CRIC if all of the predecessor corporations are, immediately before the amalgamation, related to each other (determined without reference to paragraph 251(5)(b)) and

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  • (B) if the condition in clause (A) is not satisfied in respect of a predecessor corporation, each shareholder of that predecessor immediately before the investment time is

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• (i) from a corporation (in this paragraph referred to as the “disposing corporation”) to which the CRIC is, immediately before the investment time, related (determined without reference to paragraph 251(5)(b)) and

  • (A) each shareholder of the disposing corporation immediately before the investment time is

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• (ii) on an amalgamation described in subsection 87(1) of two or more corporations (each of which is in this subparagraph referred to as a “predecessor corporation”) to form the CRIC, or a corporation of which the CRIC is a shareholder, if all of the predecessor corporations are, immediately before the amalgamation, related to each other (determined without reference to paragraph 251(5)(b)) and

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  • (B) if the condition in clause (A) is not satisfied in respect of a predecessor corporation, each shareholder of that predecessor immediately before the investment time is

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